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Explain the relationship between short run marginal cost and short run marginal product

Explain the relationship between short run marginal cost and short run marginal product
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Answer #1

Following figure depicts the relationship between short-run marginal cost and short-run marginal product -

There exists an inverse relationship between short-run marginal cost and short-run marginal product.

1. When marginal product is increasing, marginal cost tends to fall.

2. When marginal product is at its maximum, marginal cost is at its minimum.

3. When marginal product starts decreasing, marginal cost starts increasing.

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